seniorspectrumnewspaper – Last week, rumors circulated about Microsoft planning significant layoffs within its Xbox team. On Wednesday, Bloomberg confirmed that employees in Microsoft’s gaming division were informed of upcoming job cuts. The company recently announced a 3 percent reduction in its global workforce earlier this summer. The latest cuts include an additional 9,000 job losses announced on the same day.
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Microsoft’s King division, based in Stockholm and known for Candy Crush, will reduce its staff by 10 percent. This amounts to roughly 200 job cuts. Other European gaming offices are also affected, while U.S. teams received notifications later on Wednesday. These layoffs mark the fourth round at Xbox within 18 months.
Phil Spencer, CEO of Microsoft Gaming, addressed the layoffs in an email to employees. He acknowledged the timing, highlighting strong gaming engagement and a promising product roadmap. Spencer emphasized the need for tough decisions to ensure future success. He stated that the company must prioritize its strongest opportunities moving forward.
The layoffs follow a difficult year for Microsoft’s gaming division. In 2023, the company cut nearly 2,000 jobs across Xbox and Activision Blizzard. It also closed three ZeniMax game development teams after acquiring the holding company in 2021. Microsoft’s current restructuring reflects ongoing efforts to streamline its gaming operations.
Industry Context and Microsoft’s Future Strategy
The gaming industry has faced instability, with around 11 percent of game developers losing jobs in 2024. Microsoft’s layoffs come amid this broader market turbulence. Despite the cuts, the company’s financial performance remains strong. Microsoft reported over $25 billion in net income in its latest quarterly earnings.
Microsoft’s $69 billion acquisition of Activision Blizzard last October adds complexity to its gaming division’s restructuring. The integration of these assets requires strategic workforce management. A Microsoft spokesperson told Engadget that the company is making necessary organizational changes to stay competitive.
Phil Spencer’s message highlighted the company’s focus on discipline and prioritization. Microsoft plans to maintain its platform, hardware, and game development momentum. These layoffs aim to position the gaming division for sustainable growth amid a dynamic marketplace.
As Microsoft continues its restructuring, industry watchers will observe how the company balances cost-cutting with innovation. The gaming division’s ability to leverage its assets and talent will shape its future success. Microsoft’s focus remains on delivering strong gaming experiences while managing operational efficiency.
